Linking Medium-Term Strategic Planning to Annual Operating Plans and an Operating

question 40

True/False

Linking medium-term strategic planning to annual operating plans and an operating budget is undesirable since it encourages short-term thinking.

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Definitions:

Ratios

Quantitative metrics calculated from financial statements to evaluate various aspects of a company's performance or financial health.

Turnovers

The rate at which inventory or assets are sold and replaced or employees leave a company and are replaced over a given period.

Vertical Analysis

A method in financial analysis where each entry in a set of financial statements is listed as a percentage of another item, typically used for income statement and balance sheet analysis to show relative proportions.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in net profit or loss.